Best options to day trade

Have you ever wondered what sets the best options traders apart from the amateurs? Why is it that certain traders can consistently outperform no matter what the market cycle?

Below is a list of the Top 10 Traits Of Successful Option Traders. They Are Properly Capitalized — A very common mistake for beginner traders is not being properly capitalized. Before they know it, a couple of losing trades have completely wiped best their capital. Best must admit I was also guilty of this.

I was living in Grand Cayman and had just started options trading. I think in my first 6 months I broke just about every trading rule possible. I had a couple of small positions in the Day stock market, one a utilities company and the other a REIT real estate investment trust.

Both of these positions had a low beta, meaning that the stocks did not move as options as the general market. So, through lack of knowledge and understanding I thought I would sell some call options on the main ASX index to hedge and protect my long positions.

Sure enough the market rallied, I refused to admit my mistake and take my losses and hoped and prayed that the position would come back my way. Next thing you know my capital has been completely wiped out and I had to send money via Western Union and have my brother deposit the money in my account the next day. Not a great experience for me, but one that I certainly learnt from! They Have A Low Tolerance For Risk — Another important aspect of successful options trading is having a low tolerance for risk.

The best options traders will only trade when there is a low risk high reward scenario. They want to have the odds skewed in their favor as far as possible. The best options traders will not try to hit home runs with every trade. Ultimate Guide to the Stock Repair Strategy They Trade Only When The Market Provides Trade Opportunity — One quality all great traders have is patience. Successful investors will only enter into trades when the odds are stacked in their favor.

They would much rather be the house rather than the average guy on the street trade to win big. They are focused on the bigger picture and are willing to wait and have the patience to only trade when the right opportunity presents itself. Some of the best traders often talk about sitting idle and just watching the markets, waiting for the perfect time to make a trade. Amateur investors find it very hard to not trade and are captivated by all the red and green numbers on their screen and feel like they are missing out on the action.

Can you think of times in your trading when you have experienced this? Are you able to sit on the sidelines and just watch the market without jumping in? Knowing what cycle the market is in, is key to knowing when to trade and which trades to make. Each day they publish a Big Picture article which states whether the market is in a confirmed uptrend, the uptrend is under pressure or options he market is in correction.

I have found them day be incredibly insightful and you would do well to follow their advice. Their advice is trade only buy strong stocks when the market is in a confirmed uptrend day this has been a time tested method for best outperformance. By writing it day, it is clearly defined and you can refer back to it at day time. Like anything in life, in order to be successful you need to have a plan and think things through rather than just flying by best seat of your pants.

When I first started trading I would just place random trades based on how Best was feeling at the time. Needless to trade I was not very successful during this time. While some of my trades were winners it was like I was taking 1 step forward and 2 steps back. All the great traders have a clearly defined trading plan. This is crucial to your success as a beginner options trader. Trade defensively, rather than think of what you can make, best time you make a trade you should be thinking about the worst case scenario.

What could you lose and how you are going to handle the position if things go badly? Beginner traders have trouble getting a handle on how much to risk on each trade. One thing for beginner traders to consider is to split your trading capital in half, place options in an interest bearing account and use the rest to trade. This way, no matter what happens, you will never lose all of your capital. Another good risk management rule is to set a fixed percentage of you capital as your risk per trade.

Having a risk management plan is crucial to success as options trader and something that should be done before you best trading. Everyone wants to make a great trade and make lots of money, but you should never take risk management too lightly. What risk management rules fo you have in your trading options They Can Control Emotions — Options trading is an incredibly emotional journey and one that best cannot fully appreciate until you have your own hard earned money on the line.

The best traders are able to trade their emotions options just when times are bad, but probably even more importantly when times are good. The best traders can keep their ego out of the equation and are able to stay grounded even in the midst of tremendous winning streaks. Also, when one of their trades turns out to be a loser, they are able to admit they were wrong and close out the trade. Day traders never get attached to a trade or a particular stock.

A bad trade could turn out to be ok, but sticking to your pre-defined trading rules is crucial. If your timing is off and your trade breaks your stop-loss you should always stick to your trading rules and keep your emotions out of it. Get Your Free Covered Call Calculator They Are Incredibly Disciplined — Successful option trading takes a great deal options discipline. Beginner option traders may find it incredibly difficult to just sit and wait for a good opportunity to trade.

Having a money management and a risk management plan is one thing, but in order to be a successful trader, you need to have the discipline to stick to it. You also need discipline to stick to the types of trades you are successful with and not start trading strategies that you are not an expert in. Keeping a level head is essential. Staying focused can also be hard when day is so much news on the markets and so many experts, each with a different opinion.

The most important thing is to stay focused on your goals, trade trading strategy and your rules. I now can recognize those periods and I know those best the times when I really need to refocus my energies and review my trading plan. If you find yourself losing focus, or getting day distracted and stressed with everything going on, it can be a wise move to close out all of your positions and take break for a while.

Sometimes that is the best medicine and will allow you to come back with a clear head, more relaxed and more focused. They Are Committed — Options trading takes a great deal of commitment.

Any time you have your hard earned money at risk, you should be trying to get the most out of your investment strategies and controlling your risk. You need to be on top of your game all the time. Any time you stop paying attention to the market, you will get burned. Not only do you need to keep an eye on your trading performance, you need to be staying abreast of the current news, market cycles and investment outlook. You will be able to get opinions from multiple experts and it will take you less than 10 minutes a day!

They Have Back Tested Their Strategy — Backtesting is a key part of developing your trading plan. This involves evaluating your trading strategy against the historical performance of the market to check the past performance. Of course past performance does not guarantee trade performance, but it will at least give you an idea of how your strategy has performed in different time periods and market conditions.

The average investor may not have the capabilities to run these calculations on their own but there are a number of trade providers out there that will be able trade perform best. In addition, most brokers such as TD Ameritrade have backtesting software that is free to account holders.

Backtesting allows you to evaluate the pros and cons of your strategy and also provides scope for improvement or tweaking of the strategy. While I have not used these resources personally, they come highly recommended from options industry professionals. Day, those are my Top 10 Traits For Successful Options Trading, what do you think? Can you think of any other important traits options for successful investing?

For example what does it mean to be properly capitalized? How do you evaluate risk? How do you know when the trade provides opportunity? As you see I have a lot to learn. Thanks for the good beginning. Or experienced it marginally? This is almost exactly like the list I wrote for myself when I was analyzing why I was not doing as well as I wanted to.

For example, patience follows belief. Patience cannot be pulled out of the arse or willed into existence. But, as the writer accurately says, patience day essential to success. To be a successful trader long term I knew I had to be disciplined like it says above.

Sir, I am from India, I want to learn Option-Trading and trading in Indian Market, can you guide me?